Meetings will begin next week with Advent and KKR, as well
as a team formed by Onex Corp. and TPG Capital, said the people,
who asked not to be named as the process is private. The
company, which has a market value of more than $3.3 billion,
canceled talks with the firms last month to work on a deal with
fellow equipment maker SPX, a person with knowledge of the
matter said then.

“I would actually be surprised if something wasn’t
announced within the next month,” Joshua Pokrzywinski, an
analyst with MKM Partners LLC, said yesterday. “It’s a
distraction for the employees and ends up being an actual
headwind to the core business. If they can get this buttoned up,
all the better for the company.”

The earlier agreement collapsed in part because SPX
couldn’t get the terms it wanted on a loan, people familiar with
the process said last month. SPX had offered about $85 a share,
and private-equity firms may not be willing to pay as much for
Wayne, Pennsylvania-based Gardner Denver, said two people. The
earlier private-equity bids had come in around $73 to $75 per
share, said two of the people.

‘Highly Likely’

“Ultimately a deal is highly likely here,” said
Pokrzywinski, who is based in Stamford, Connecticut, and has a
neutral or hold rating on the stock. “Gardner Denver would be
amenable to something at or slightly above $75. That would get
it done.”

The shares fell 0.5 percent to $68.34 at the close in New
York yesterday after having advanced as much as 5.4 percent
earlier in the day when Bloomberg News first reported the
renewed talks.

Gardner Denver makes compressors, pumps and other products
for industries including manufacturing and energy exploration.
Its fourth-quarter results may help to determine bid prices,
said one of the people.

Gardner Denver sank 11 percent in New York on Dec. 21, when
reports surfaced that the SPX deal collapsed. Gardner Denver
said then that it would continue to work with its adviser,
Goldman Sachs Group Inc., to pursue options including a sale.
Michael DuVally, a spokesman for New York-based Goldman Sachs,
didn’t immediately return a call seeking comment.

Earnings Potential

Gardner Denver began working with Goldman Sachs on
strategies after activist investor ValueAct Capital Management
LLC began lobbying for a sale in July, people familiar with the
matter had said. ValueAct owned about 5.1 percent of Gardner
Denver as of Sept. 30, according to data compiled by Bloomberg.

Private-equity firms are attracted to Gardner Denver
because of earnings potential at its compressor business, which
is one of the world’s largest alongside the units of Ingersoll-Rand Plc and Stockholm-based Atlas Copco AB, Pokrzywinski said.
Profit margins at the compressor unit, which trail its
competitors, could rise as much as 600 basis points over the
next five years, he said.

“The private-equity guys would look at that as a margin
opportunity,” he said.